Over the past 5 years, many Nordic companies have eyed the US market as an opportunity and stepping stone for global sales expansion and profitability. However, according to recent NVCA statistics, less than 5% of these companies are successful in gaining revenues and market share within their first year. Interestingly, an even smaller percentage continue to pursue US business after year one.
To be successful in growing their business in the US and beyond, the Nordic company needs to be aware of and avoid the Top Five Mistakes to Global Expansion.
NOW is the time act since as the US economy is recovering from the Great Recession, there is an openness to new ideas and funds available in the US market today. To take advantage of these opportunities, avoid the top five mistakes of global expansion – through the US as a starting point.
- Underestimate the requirements for success. In Next Step’s experience the amount of time from initial market entry to revenue in the US is a minimum of 12 -18 months. There are techniques which can be utilized to minimize this. but any executive team considering the US market should be prepared for time and financial investments for 18 months prior to generating a steady revenue stream
- Lack of focus on ideal market segment. The US is a very large country with many different demographic market segments and areas. For success, it is important that the European company identify one to three key market segments either by industry, geography or other demographic as the area in which the company’s products and services can bring the greatest value. After gaining market success and penetration in one area, this success can be replicated to new US markets in an efficient and profitable manner.
- Do not have a compelling value proposition. While there is an openness to new ideas and funding available for strategic purchases, US business decision makers and consumers today are highly attuned to ‘schemes’, ‘me too products’ and other offerings that meet only a portion of their needs. To gain customers, revenues and market traction, your company / product must have a clear, unique and compelling value proposition.All communications to the market (through marketing promotions, sales activities and all customer interactions) must clearly state and demonstrate how the product or service will deliver real value in financial, functional and emotional terms to the buyer / customer.
- Go it alone without fully leveraging US partners and alliances. While you may have great resources for growth in the European market, US buying patterns, legalities and modes of doing business is are quite different from those in Northern Europe.
To speed penetration in the US market, successful international companies seek and leverage partnerships or alliances with US service providers, sales channels and customers. Individuals in these organizations know the US market dynamics, understand the buying criteria and decision making processes and often have the networks to provide faster access to prospects, customers, investors or other valued market partners.
- Ineffective sales execution- Many unsuccessful companies had a great business plan, clear market focus and value proposition as well as good supporting partners, but just never succeeded in closing a steady stream of revenue from a diverse customer base. The majority of these failures can be attributed to ineffective sales execution.
Sales execution issues often arise due to ineffective choice of sales channel or team (ie using inside sales or a hired ‘sales rep’ when the target customer prefers to buy online or through known distributors or partners) or through lack of a clear, effective sales process through which ideal target customers are identified, qualified, and developed before conclusion of the sales campaign through negotiation of mutual value to build a long term relationship.
As the US economy is recovering, Nordic companies have a great opportunity to plan and execute their international expansion into select segments of the US market. Through awareness of these common mistakes and making plans and developing the relationships required to overcome these fallacies, savvy business executives and entrepreneurs can leverage the opportunities today to develop a steady US revenue stream within 18 months.Written by: Jennifer Vessels, CEO Next Step
Next Step, based in Silicon Valley provides practical consulting services in sales, marketing and people development. The team of 40 seasoned professionals, with extensive global experience is proven to deliver real revenue results for Nordic companies expanding into the US.
For more information on Next Step and their clients, see www.nextstepgrowth.com.